Note: The below post relates to clergy in the Evangelical Lutheran Church of America (ELCA) and their benefits provider, Portico. This said, the method detailed below could well apply to clergy across denominations and non denominations as an option for health insurance care.
First thing: The vast majority of ELCA churches have only one employee (and likely their family) receiving healthcare through Portico. The health medal election must be made annually by individual churches for all their Portico member employees. Only one medal choice can be made and must then apply to all portico members at that church (such that if Gold is chosen, only Gold plans will be available for all that church's portico member employees).
The HSA option: Although Gold is often recommended, any one medal plan (Platinum, Gold, Silver or Bronze) doesn’t fit all. If you are moderately physically and financially healthy, a Silver plan or Bronze plan with congregation HSA contribution can be a huge winner (the congregation contributes a monthly amount toward the HSA for this option). These plans have higher deductibles, but the HSA (Health Savings Account) is powerful. Health Savings Accounts are individual accounts that provide money, contributed tax free, for individual or family health expenses and can be put toward deductible expenses. This in turn can reduce the actual out of pocket costs for patients if and when healthcare is used. Additionally, money contributed to an HSA does not expire, does roll over year after year and can be invested via Portico's partner Select Account.
Through good health, building up the value of an HSA account over the years can be a great health investment toward future health cost needs or even a supplement to retirement, if held onto into retirement.
To consider an HSA plan you will need to consider either a Silver+ or Bronze+ plan WITH HSA option. If suitable, have your congregation elect for that medal plan for the coming year. The cost to the congregation, by the way, for a Silver plan with HSA contribution by the congregation to your HSA account will usually be fairly close to the same cost as a Gold plan (that has no HSA option).
To make the case for an HSA plan, consider this example:
Example Criteria: This comparison will consider the 2016 Gold+ plan vs. the Silver+ plan with HSA Congregation Contribution for a family of four living in North Carolina. In this family is one clergy and their spouse (both age 40) and 2 dependents. All are insured through Portico. To make the math easy, it will be assumed the defined compensation for the clergy person is $60,000/year.
Gold Plan Example: The cost to the congregation for the Gold plan, which covers Health Insurance, Disability, Basic Group Life and Retiree Support for this family will be: $21,480. For the clergy family, the Gold plan family annual deductible is $2,400 and the out of pocket maximum is $7,600.
Silver Plan with $2400 Family HSA Congregational Contribution Example: The cost to the congregation for the Silver plan with $2,400 HSA Contribution, which covers Health Insurance, $2400 HSA contribution, Disability, Basic Group Life and Retiree Support for this family will be: $21,960. For the clergy family, the Silver plan annual deductible is $5,000 and the out of pocket maximum is $8,200
If this family had chosen the Silver plan with HSA vs. the Gold, the risk they would have taken this year was a $200 annual increase in their health care deductible (after $2,400 HSA contribution, here's the math: Silver is $5,000 - $2,400 HSA = $2,600 deductible vs. Gold's $2,400 deductible) and an $1800 out of pocket maximum decrease (via Silver's $8,200 max - $2,400 HSA contribution = $5,800 vs Gold's $7,600 max). This said, let's say this family uses an average of $1,000/year in health care costs. With the gold plan, there is no additional savings and the family pays $1,000 out of pocket. With the Silver plan, the congregation's $2,400 contribution covers the $1,000 deductible cost and leaves $1,400 in the HSA to be invested and rolled over to the following year(s) for future health needs.
If the HSA rolls over using the above example and costs were to stay the same in the years to follow, in just 4 years the entire out of pocket maximum for the Silver plan will be available in the HSA account. After this time, the HSA continues to grow in value and eventually, whatever is not used can be a supplement to retirement functioning similarly to a traditional IRA. In this created example, the silver plan is a huge winner!
Important: For 2017, A little research here could yield big heath care savings for pastors. It is worth the time to research this option closely, but this must be done quickly, as churches must make their health care medal elections very soon. Please don't take the above as gospel as you consider your choices. Make your own informed health care elections and do your due diligence into these options. Do your own math! No one option fits all. For Portico members, here's the link to the page where you can compare directly the deductible realities for the Platinum+, Gold+, Silver + (with HSA) and Bronze+ (with HSA).
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About the Author
Hi, I'm Pastor Andrew, an ELCA pastor with a love for sharing empowering personal stewardship for fellow church leaders. I enjoy researching the financial wisdom of the scriptures and of fellow church leaders and I hope to share my findings in a way to help clergy of all types!